Tribune Sale at Issue as Newspaper Woes Mount

TRIBUNE SALE AT ISSUE AS NEWSPAPER WOES MOUNT
[SOURCE: Associated Press, AUTHOR: ]
Billionaire real estate investor Sam Zell was viewed as a savior in some quarters last spring when he swooped in to orchestrate an $8.2 billion buyout offer for Tribune Co. amid tepid interest for the ailing newspaper publisher. Now the industry's accelerating decline has some Wall Street experts wondering whether the deal for the parent company of the Chicago Tribune, Los Angeles Times and Chicago Cubs could fall apart. And even if it goes through, the employee stock ownership plan that will own most of the company could face a debt burden even more onerous than the one envisioned in April. Zell so far has put up only $50 million in cash, and his ability to walk away appears restricted to certain scenarios which, according to those following the deal closely, don't yet exist. But double-digit drops in revenue and cash flow at the Los Angeles Times as well as deteriorating results at other newspapers have heightened speculation about the potential for the transaction to collapse before the planned closing late this year.
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